North America

FDA Issues Draft Guidance on Cannabis Clinical Research and Sends CBD Enforcement Discretion Guidance to OMB for Review

FDA took two important steps last week to clarify the regulatory landscape for cannabis products, including CBD products.  First, FDA issued a draft guidance on Quality Considerations for Clinical Research Involving Cannabis and Cannabis Derived Compounds.  This guidance builds off of earlier guidance FDA has issued about the quality and regulatory considerations that govern the development and FDA approval of cannabis and/or cannabinoid drug products.  See e.g., here and here.  The draft guidance iterates a federal standard for calculating delta-9 THC content in cannabis finished products, which addresses a significant gap in federal policy regarding those products.  While the testing standard is neither final nor binding on FDA or DEA, when finalized it would iterate what FDA considers to be a scientifically valid method for making the determination of whether a cannabis product is a Schedule I controlled substance.  Therefore, it may be useful in many contexts, including federal and state cannabis enforcement actions.  We encourage affected parties to file comments on FDA’s Guidance, which they may do until September 21, 2020.

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ECJ Invalidated the EU-US Privacy Shield Framework

On July 7, the Court of Justice of the European Union (ECJ) invalidated the EU-US Privacy Shield framework in its ruling in Data Protection Commissioner v. Facebook Ireland and Maximillian Schrems (Case C-311/18). More than 5,000 organizations in the United States have certified their adherence to this framework, and have relied on it to receive personal data from organizations in the EU in compliance with the General Data Protection Regulation (GDPR) since 2016. The framework was a joint effort between the US Department of Commerce and the European Commission and Swiss Administration to provide companies on both sides of the Atlantic with a mechanism to comply with data protection requirements when transferring personal data from the European Union and Switzerland to the United States in support of transatlantic commerce. The Department of Commerce released the following statement:

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DOL Provides Guidance for Private Equity Investments in 401(k) Plans

Employers that are fiduciaries of participant-directed individual account plans (such as 401(k) plans) subject to the Employee Retirement Income Security Act of 1974, as amended (‘Plans” and “ERISA”, respectively) should be pleased with the position taken by the Department of Labor (“DOL”) in an information letter dated June 3, 2020 (the “Letter”) addressing the use of private equity investments in designated investment alternatives offered in Plans.  The DOL states that, subject to the standards and considerations set forth in the Letter (and summarized below), a Plan fiduciary would not violate its duties under sections 403 (29 U.S.C. 1103) and 404 (29 U.S.C. 1104) of ERISA solely because the fiduciary offers a professionally managed asset allocation fund with a private equity component as a designated investment alternative in a Plan.

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The Board Brings the NLRA Into the Modern Era of Discipline for Abusive Conduct, and Union Leaders Lament “Guys Like Us, We Had It Made. Those Were the Days.”

On Tuesday, the three-member, all Republican, National Labor Relations Board (the “Board”) issued a 3-0 decision in General Motors LLC and Charles Robinson, 369 NLRB No. 127 (July 21, 2020), reversing its longstanding standard for determining when employers violate the National Labor Relations Act (the “Act”) by disciplining employees who, while engaged in activity protected under Section 7 of the Act, use profanity-laced speech, as well as racial, ethnic or sexist slurs, or other abusive conduct toward or about management or other employees. Going forward, including to any unfair labor practice case currently pending, the Board will apply its familiar burden-shifting standard under Wright Line, pursuant to which a charging party must show through evidence that the employer would not have disciplined the employee but for his or her engaging in the protected activity, and the employer will not violate the Act where it shows the employee would have been disciplined because of the abusive speech or conduct regardless of any involvement in protected activity. The Board will no longer treat the engagement in the protected activity and the abusive conduct as being analytically inseparable. Nor will the Board any longer presume in such circumstances the issue of causation between the employee’s discipline and his or her involvement in protected activity. In so doing, the Board has brought the Act into the modern era so as to be consistent with current workplace standards of decorum and employers’ legal obligations under antidiscrimination laws. To those union leaders and employees who engage in abusive and offensive language or other conduct, similar to that old television dinosaur Archie Bunker, they may well reminisce about the old days when guys like them had it made and they were protected from discipline.

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A Snapshot of our Recent Activity — Insurance Law

July 24, 2020 — A brief portrait of cases and activities of RSS’s Insurance Law Practice Group over the past few months

Active Despite the Coronavirus

The pandemic has not spared the legal community. However, as legal services were quickly declared essential services by the Quebec government, we were able to maintain our activities.

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U.S. Supreme Court Lets Stand Ninth Circuit Ban on ‘Salary History’ Defense to an Equal Pay Act Claim

In recent years, wage discrimination has been a hot topic and with it, the question of whether employers may rely on a worker’s salary history to justify a pay disparity between male and female employees. In a 2018 case involving the federal Equal Pay Act (“EPA”), Rizo v. Yovino, (about which we wrote here), the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”) ruled that employers may not rely on prior salary to excuse unequal pay. On petition, the Supreme Court vacated the decision and remanded the case on a technical ground (i.e., because the judge who authored the opinion died before release of the decision). On remand, the Ninth Circuit ruled as it had before. On July 2, 2020, the Court declined review, thereby leaving the Ninth Circuit’s ruling in place.

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Third Circuit: Provider’s Out-of-Network Claims not Pre-empted by ERISA

In an important win for healthcare providers, on July 17, 2020, the Third Circuit determined in a published opinion that an out-of-network provider’s direct claims against in insurer for breach of contract and promissory estoppel are not pre-empted by ERISA.  In Surgery Ctr., P.A. v. Aetna Life Ins. Co.[1] In an issue of first impression, the Third Circuit addressed the question of what remedies are available to an out-of-network provider when an insurer initially agrees to pay for the provision of out-of-network services, and then breaches that agreement.

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Global Diversity: A Practical Approach

Tracking diversity and inclusion efforts on a global basis is often a challenging task for in-house legal, human resources, and diversity and inclusion teams.  While employers may be interested in collecting applicants’ and/or employees’ diversity information for worthy reasons, such an effort is a fertile ground for potential litigation involving data privacy violations and discrimination claims.

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Illinois Court Joins California Courts in Requiring Postmates to Pay Millions in Arbitration Fees to Defend Hundreds of Individual Arbitrations Continue Reading…

As we wrote here recently,  two federal courts in California rejected Postmates’ attempt to escape having to defend thousands of individual arbitrations filed by drivers contending they have been misclassified as independent contractors. Those decisions require Postmates to pay millions in arbitration fees alone.

A federal court in Illinois has now reached the same conclusion, holding that Postmates must proceed with more than 200 individual arbitrations that will cost Postmates $11 million in arbitration fees.

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Queen Anne’s Revenge, Indeed!: Copyright Conundrums, Sovereign States, and IP Piracy

“One man’s legally sanctioned privateer is another man’s pirate.”          

[James Wadsworth, Global Piracy: A Documentary History of Seaborne Banditry (2019), at p. 8]

We live in a time of contradictions and confusion, and today we aim to explore how some such tensions have manifested themselves in the area of intellectual property law.

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